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Powers of attorney offer many benefits but vulnerable to abuse

On Behalf of | Oct 26, 2018 | Guardianships | 0 comments

Regardless of their age, a Virginia resident could realize many benefits by creating a financial power of attorney. The individual can designate someone to take care of their finances under the conditions that they specify. Usually, a crisis, such as mental or physical incapacity, triggers the transfer of financial decisions from the principal to the agent. A person might alternatively choose to hand off financial decisions as soon as the POA is executed. For a person who no longer has the ability to manage money, a trusted agent named by the POA could prevent bills from piling up and other financial problems.

Depending on the extent of powers granted, an agent could set up a trust or alter beneficiary designations on an estate plan. A conscientious agent might take steps to limit taxes on a person by arranging for financial gifts to relatives. In other scenarios, an agent might halt transfers of money to someone who has become unpredictable, like a drug addict.

Because a principal might wish to grant extensive financial decision-making powers to an agent, great care must be taken in selecting the agent. A dishonest agent might take the principal’s money for personal benefit.

When a person wants to set up a POA or address other issues regarding an estate, legal guidance can be very beneficial. A Virginia attorney handling guardianships could listen to the person’s concerns and recommend smart approaches. An attorney can explain the legal issues that may arise when a person needs to hand off responsibilities. The insights of an attorney might lead to selecting the right people to handle medical or financial decisions.